New GST Rules From 1 November 2026: Post-Supply Discounts, 90% IDS Refunds & RCM e-Invoicing
On 26 October 2026, the CBIC notified three major Central Tax Notifications—Notification No. 03/2026-CT, Notification No. 04/2026-CT, and Notification No. 05/2026-CT.
These notifications operationalize key provisions of the Finance Act, 2026 and update the Central Goods and Services Tax Rules, 2017 with effect from 1 November 2026 and 1 January 2027.
1. Notification No. 03/2026-Central Tax: Discounts & Refund Rules (1 Nov 2026)
Notification No. 03/2026 brings Sections 153, 154, and 155 of the Finance Act, 2026 into statutory force on 1 November 2026:
A. Section 15(3)(b) — Post-Supply Discounts Without Prior Agreement
Historically, suppliers could reduce their output tax liability via a GST Credit Note only if the discount was established under an agreement entered into before or at the time of supply and linked directly to relevant invoices.
From 1 November 2026, this restrictive condition has been deleted. Suppliers can issue GST credit notes for post-supply volume rebates, turnover discounts, or settlement write-downs freely, provided the buyer reverses the corresponding Input Tax Credit (ITC) through the Invoice Management System (IMS).
B. Section 54(6) — 90% Provisional Refund for Inverted Duty Structure (IDS)
Previously, only zero-rated exporters could receive 90% provisional refunds within days of filing. Effective 1 November 2026, Inverted Duty Structure refund applicants also qualify for 90% provisional sanction within days, releasing massive working capital for domestic manufacturers.
C. Section 54(14) — ₹1,000 Floor Lifted for Export Parcels
Small exporters shipping parcels via international couriers or postal routes can now claim GST refunds even when the tax amount is under ₹1,000.
2. Notification No. 04/2026-Central Tax: Mandatory RCM e-Invoicing (1 Jan 2027)
Amending Notification No. 13/2020-CT, CBIC has mandated that all taxpayers subject to e-invoicing must generate Invoice Reference Numbers (IRN) for:
- Reverse Charge Supplies from Unregistered Suppliers (
RCMDOM): Self-invoices issued under Section 31(3)(f). - Import of Services (
RCMIMP): Cross-border services subject to reverse charge.
This requirement takes effect on 1 January 2027 using the updated INV-01 v1.2 e-invoicing schema.
3. Notification No. 05/2026-Central Tax: CGST (Amendment) Rules, 2026
Effective 1 November 2026, Notification 05/2026 introduces critical procedural updates:
- New Rule 14B (E-Commerce Warehouse Registration): Online sellers can register in multiple States by declaring an authorized E-Commerce Operator's (ECO) fulfillment center as their Principal Place of Business, provided monthly B2B supplies in that State do not exceed ₹2.5 lakh.
- Rule 89(5) Revised IDS Refund Formula: Input Services are now officially included inside
Net ITCcalculations from 1 November 2026. - Rule 89(4)(C) Export Valuation Cap Omitted: Abolishes the arbitrary ceiling that capped zero-rated export turnover at 1.5 times domestic value.
- Rules 90 & 91 Fast-Track Timelines: Acknowledgments (
RFD-02) must be issued within 10 days, and provisional refund sanction orders (RFD-04) within 3 days.
4. Master Implementation Checklist for Taxpayers
- Review Vendor Discount Contracts: Update commercial dealer agreements to leverage flexible credit notes without prior agreement clauses.
- File Inverted Duty Refunds: Recalculate pending FY 2025-26 and FY 2026-27 IDS refund claims to incorporate accumulated Input Services ITC.
- Upgrade ERP for RCM e-Invoicing: Configure accounting software (SAP, Tally, Zoho) to support self-invoice IRN generation prior to 1 January 2027.
5. Partner With RegisterYourFirm for Effortless Compliance
Staying compliant with rapid GST regulatory changes requires experienced professional support. At RegisterYourFirm.com, our Chartered Accountants ensure your commercial agreements, inverted duty refund applications, and e-invoicing workflows comply fully with the latest CBIC notifications. Contact us today for end-to-end tax advisory.